Health economics is a branch of economics that deals with the problems related to the economic aspects of health and health care services. The growth of the subject dates back to the year 1963 with the publication of a seminal work by Kenneth Arrow. It was in this article that different concepts related to health were identified and the uniqueness of health care as an economic segment was defined. The unique elements of health care are the strong presence and intervention of government, uncertainty of demand and the involvement of a third party (doctors )which is the major stakeholder.
It is seen that the demand for healthcare products is derived demand, based on the demand by the consumers to achieve a higher and better stock of health capital. The role and the relevance of health economics has increased many folds because of the demand for good health and the awareness of people about having a good health apart from the various healthcare options available to the consumers. Developing economics are the emerging markets of the health care sectors and therefore healthcare economics is studied in juxtaposition to the overall growth of the economic variables in the given set of conditions.
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